High inflation could stick around for years

It's running at 4.9 percent.

Institute of Economic Research principal economist, Christina Leung, says businesses have been passing on extra costs for things like construction materials and labour, leading to higher prices.

But she says the market's increase in inflation expectations is more worrying.

Leung says the Reserve Bank will be very mindful of the risk of igniting a wage-price spiral, in which case inflation will become more persistent over the coming years.